In the past five years several litigations were attempted to exclude the penal liability under Section 138 of the NI Act in respect of dishonored postdated checks. The Supreme Court assertively intervened to clear the legal position regarding the strict application of Section 138 to dishonor postdated checks. The present article looks at the impact of the Supreme Court judgments with a focus on the statutory presumption that can be applied to advance the remedy for countermanded postdated checks.
If law is to be considered as an ideal of morality, it must be consistent and support the accepted norms of public conduct. The procedure required to enforce such law should reflect the common moral values of society. Procedure, being the pivot of any legal system is driven by the modes of proof. The system of law governance tries to keep away those litigants who thrive on complicated and ambiguous legal provisions. It is in this context that the jurisprudence of judicial presumption has evolved to protect the honest and innocent parties to litigation. This casts a responsibility on the judge to find the existence of the fact presumed unless the defendent provides evidence to contradict it. Under the presumption of law or statutory presumption, the plaintiff can raise the presumption in his favor. The presumption of law, thus, shifts the burden of proof to the defendant. The presumption of law is an imposed presumption and the rule for providing such a presumption would be rebuttable, by evidence to disprove it. The statutory presumption though is essentially of law, it is also a question of fact to be proved in each case as explained under Indian Evidence Act, 1872.
Section 118 of the Negotiable Instruments Act, lays down a special rule of evidence, applicable to negotiable instruments. The presumption is one of law and there under a court shall presume, inter alia, that the negotiable instrument or the endorsement was made or endorsed for consideration. In effect, it throws the burden of proof of failure of consideration, on the maker of the note or the endorser, as the case may be. Once the execution of the negotiable instrument is admitted, the presumption under Section 118(a) of the Negotiable Instrument Act would arise that it is supported by a consideration. Such presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. Section 119 of the Negotiable Instruments Act, presumes the fact of dishonor on proof of protest. Since there is no statutory compulsion for protest in case of a dishonor of checks, a return memo from the bank can be accepted. |
